Just about every study on marital discord concludes that disputes over money is the number one reason why spouses argue. Since recessions tend to lower income, and since lower income generates financial distress, a recession might trigger a divorce. By triggering a divorce, it might also trigger other family law issues such as child custody, child support, and alimony. A recession that arises after a divorce or separation might also affect these family law issues.
On the other hand, marriage is a relatively efficient economic arrangement. Maintaining two households generally costs more than maintaining only one. For this reason, some couples delay divorce during a recession because they literally cannot afford a divorce. Divorce rates tend to decrease during recessions.
How a Recession Affects Child Support and Alimony Payments
A recession could cause you to lose your job and accept a lower-paying job. If this happens, your child support payments might decrease due to your lack of resources. This might lessen the financial blow of a recession for a non-custodial parent who pays child support and perhaps alimony as well.
If you are the recipient of child support or alimony payments, however, you might have to settle for a lower income than you did before the recession. Even if the other party gets a higher-paying job during a recession, thereby entitling you to higher payments, you will have to petition the court for modification of these payments.
Effect on Children and Child Custody
A recession may result in minor children having to accept a lower standard of living due to decreased child support and alimony payments. This might mean, for example, fewer extracurricular activities. Additionally, the division of one household into two might result in less luxurious living arrangements. The living arrangements offered by each spouse might also affect child custody decisions.
Effect on Property Division
In a divorce, a court will divide the marital property and distribute it to the divorcing spouses. A recession can lower the value of the assets that the court divides. A recession might, for example, dramatically lower the value of real estate. Without careful consideration, this could result in an unfair result. If a court distributes the family home to a custodial parent, for example, the value of the home might rise dramatically after the end of the recession.
Alternatively, one spouse might “buy out” the other spouse’s interest in a home at a discount price during a recession. Although that might result in a financial windfall for the buying ex-spouse, there is a downside. If they have to refinance the home, home mortgage interest rates might rise during a recession. It’s important to understand how these two factors balance each other out so that you fully understand the consequences of your transaction.
In addition, the stock market might go down during a recession. If one divorcing spouse receives stock at a discount because of the recession, these stocks might rise dramatically in value after the recession ends. A recession could erode the value of a business or even result in business bankruptcy. That could leave a much smaller pie to divide between the two ex-spouses.
Should You Delay Your Divorce in a Recession?
In some cases, it’s a good idea to delay a divorce until after a recession, especially if a separation is feasible. In other cases, such as domestic violence, you might feel you need to divorce immediately. Whatever you decide, remember that in New Jersey, one spouse can impose a divorce upon their unwilling spouse regardless of whether it makes financial sense.
Talk to a New Jersey Divorce Lawyer
Even if you anticipate an amicable divorce, it makes sense to consult with a New Jersey family lawyer to decide on the timing of your divorce. A lawyer can also examine your divorce settlement agreement or at least look it over before both parties sign. Ideally, each spouse will hire their own lawyer. Think carefully, however, before you opt for a one-lawyer divorce.
Contact an Experienced Monmouth County Family Law Attorney at The Law Office of Jennifer J. McCaskill, LLC for Legal Advice
To learn more and get the help you deserve, call our divorce & family law firm in Red Bank. NJ at (732) 747-1882 or contact us online today.
You can also visit our law firm at 157 Broad St #111, Red Bank, NJ 07701.
